New Issue Brief: Drug Shortages Demand Congressional Action

Greater FDA accountability and collaboration with partners abroad will address chronic scarcities

New York, NY – The number of drug shortages in the U.S. is at an all-time high, with 152 ongoing shortages listed by the FDA, exceeding previous records. In a new issue brief, Manhattan Institute senior fellow Randall Lutter illustrates why this crisis is even worse than it appears, why Congress should respond to it, and how it can fruitfully do so.

While market economics dictate that drug shortages should self-correct—with excess demand incentivizing increased supply—Lutter identifies the factors that have made drug shortages a chronic problem. These include government regulations on the entry of new competitors and manufacturing practices, pressure on pharmaceutical companies to avoid any semblance of opportunism, and insufficient information about the drug shortages for those who would otherwise seek reform. He also analyzes the efforts of both Democrats and Republicans to address the issue, explaining why they have fallen short.

Lutter places a spotlight on the U.S. Food and Drug Administration’s lack of a coherent definition of shortages and expresses doubts about the agency's effectiveness in managing them. He concludes with several avenues for Congress to address pharmaceutical shortages, including:

• Bolster FDA accountability: requiring an independent evaluation of the FDA's shortage identification and management programs.
• Rely on trusted allies: formalizing the importation of foreign pharmaceuticals to address shortages, focusing on reliable trading partners.

Read the full issue brief here.